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Alcohol Taxation
07 July 2022
Lead MP
Alun Cairns
Debate Type
General Debate
Tags
TaxationBrexit
Other Contributors: 16
At a Glance
Alun Cairns raised concerns about alcohol taxation in the House of Commons. A government minister responded. Other MPs also contributed.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The debate is about simplifying the complex system of alcohol taxation in the UK post-Brexit. The speaker highlights the positive steps taken by the Government to lower duty on draught beer and broaden the reduced rate, while emphasising the need for further refinements such as a greater reduction in beer duty and minor adjustments to support smaller brewers and innovators. He also discusses the benefits of simplifying tax structures for cider producers, vineyards, sparkling wine producers, and general wine makers. The speaker argues that the current proposal introduces unnecessary complexity and administrative burden on businesses and retailers. He calls for minor adjustments to achieve the Government's objectives while streamlining the process.
Jim Shannon
DUP
Strangford
Commends Alun Cairns for bringing forward a debate on alcohol taxation, particularly highlighting its importance to local pubs and restaurants. He questions whether proposed steps by the Government will help these establishments recover lost business from major retailers.
Congratulates Alun Cairns on securing this debate and draws attention to the concerns of small cider producers like Thatchers Cider in his constituency regarding increased complexity and administrative burden under the proposed changes. He asks for support from the Minister.
Mims Davies
Con
East Grinstead and Uckfield
Raises issues specifically affecting local vineyards such as Bolney Wine Estate and Ridgeview, urging the Government to address their concerns about new complexities impacting small producers and tourist attractions. She asks for support in helping these businesses grow.
Welcomes Alun Cairns' comments on the brewing industry and questions whether the proposed changes might affect trading relationships with countries like Australia, where winemakers are seeking to diversify from Chinese markets. He asks for engagement with these Governments.
Agrees with Alun Cairns' points on wine taxation and highlights the concerns of Direct Wines in his constituency over potential dangers to their business if changes proceed without further consultation. He suggests delaying implementation until more discussions can take place.
Daisy Cooper
Lib Dem
St Albans
Critiques the Treasury's relief scheme for draught beer and cider, highlighting that it excludes many small brewers due to a minimum container size of 40 litres. Suggests lowering the threshold to 20 litres to provide more assistance. Discusses negative impacts on port producers in Hertfordshire from proposed changes, urging for a full cost-benefit analysis. Emphasises the importance of protecting British brewers and distributors from spiralling costs.
Flick Drummond
Con
Meon Valley
Welcomes removal of supertax on English sparkling wine but criticises proposed wine duty changes that would increase prices for 70% of wines. Supports reducing container size to 20 litres for the draught duty rate, benefiting small brewers and cider makers. Advocates for a more simplified tax regime based on 12% ABV for wine and 18% ABV for fortified wine.
Mike Wood
Con
Kingswinford and South Staffordshire
The hon. Member emphasises the positive contributions of British beer and pubs to the economy, society, and culture. He notes that pubs contribute about £23 billion to GDP and over £10 billion in taxes annually, despite being heavily taxed compared to other industries such as US tech companies. The MP also highlights employment benefits, community support, charitable activities, and tourism contributions of these establishments. Additionally, he calls for tax reforms to ease the burden on pubs and brewers, welcoming recent alcohol duty reviews and suggesting further relief measures.
Mims Davies
Con
East Grinstead and Uckfield
The hon. Member acknowledges the long-term career opportunities and charitable contributions made by pubs in her constituency, mentioning a fundraising event held at the Burrell Arms for Macmillan Cancer.
Daisy Cooper
Lib Dem
St Albans
The hon. Member expresses concern over the potential loss of about 10,000 pubs and restaurants due to the current tax system pressures, arguing that reforms must extend beyond alcohol duty reviews to address fundamental issues facing the hospitality sector.
Richard Thomson
SNP
Paisley and Renfrewshire North
Thomson expressed pleasure in participating in the debate, congratulating Alun Cairns on securing it. He highlighted his membership of the Scotch whisky all-party parliamentary group and acknowledged the presence of a Minister despite recent political turmoil. He emphasised the need for alcohol duty review based on complexity, economic impacts, social and health concerns, suggesting that this matter could have been addressed at any time. Thomson advocated for a regime supporting domestic innovation in product and technological advancements while considering social and health impacts. He criticised the apparent bias against stronger alcohols such as whisky, vodka, and gin within the current duty system. He cited his constituency's significant role in Scotland’s whisky industry and its contribution to Treasury revenues and the UK balance of payments. Thomson argued that high levels of taxation on domestic products like whisky may influence consumer behavior towards non-domestic alternatives, which could be detrimental when striking trade deals with other jurisdictions. He also addressed minimum unit pricing policy, stating it has been a positive measure in Scotland and Wales without causing cross-border issues as previously feared.
Wayne David
Lab
Caerphilly
David intervened to confirm that minimum unit pricing had also been introduced positively in Wales.
Erith and Thamesmead
Congratulates the right hon. Member for Vale of Glamorgan on securing the debate, welcomes the opportunity to discuss principles behind taxation of alcohol and details of the Government’s review, thanks other MPs for their contributions, notes importance of local businesses in supporting jobs and economies, outlines Labour's principles for changes including simplification, consistency, protecting public health, revenue generation, and mitigating unintended consequences, raises concerns about proposed wine duty changes increasing regulatory burden on small businesses, welcomes beer duty proposals but highlights risks to small brewers and community pubs, questions whether cider duty changes go far enough in addressing problem drinking associated with strong ciders, urges Government to work with spirit distillers, particularly the Scotch whisky industry, supports proposal for a new small producers relief but notes exclusion of certain products, calls for further clarification from the Minister.
Lucy Frazer
Con
South East Cambridgeshire
Mrs Frazer responded to the debate, congratulating Mr Cairns on securing it. She emphasised that these reforms are necessary as they make the system fairer, simpler and more aligned with public health goals compared to the EU's inherited regulations. She outlined significant benefits of reform including a simplified duty system, equalizing duty rates for sparkling wine and still wine, reducing duties on rosé, and introducing new rates for low-strength drinks below 3.5%. She also addressed specific concerns raised by hon. Members such as issues with keg size, the complexity of small producers’ relief, and fortified wines.
Daisy Cooper
LD
St Albans
Ms Cooper intervened to ask which specific EU regulation was preventing duty reform.
Richard Thomson
SNP
Gordon
Mr Thomson pointed out a discrepancy in whisky duty rates between the UK and Spain, questioning whether there were any Brexit benefits that had led to this differential staying unchanged even with frozen whisky duties.
Government Response
Minister Lucy Frazer responded to several points raised during the debate. She detailed how Treasury Ministers engaged extensively with various stakeholders and businesses, both large and small, ensuring that all viewpoints were considered in the reform process. She acknowledged specific concerns such as keg size issues, complexity of small producers’ relief, fortified wines, and cider regulations. The Minister assured Members that they were listening to feedback from the debate.
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